PensionPro

Deleted. Thank you.

Based on 213(d) I don't see how this could be considered medical expense.

see 514©(9)

My understanding is the UBTI rules do not apply here unless the real estate is incidental to the running of a business such as a hotel or a motel.

see discussion here esp post 9: http://benefitslink.com/boards/index.php?showtopic=50202

What about returns and exchanges? Let's say salary deferral increased by SaverNation by $50 in December. Employee returns the purchase for a credit. Does SaverNation then REDUCE deferrals by $50 in January of following year? And what if employee terminated by then? Or if SaverNation is going to wait till the return period has expired what if the employee terminates before the deferral increase is processed? Also curious about the amendment. Is it a model amendment and who pays for the cost of amending the plan - SaverNation or employer? Something substantial from ASPPA such as an ASAP would be in order since according to the article, SaverNation advisory board member, ASPPA’s Brian Graff, echoes that: “In an era of cutbacks and freezes, SaverNation provides a no-fee way to provide real value to employers. I encourage everyone to try it, because it really works.”

Firstly, to me this arrangement seems to primarily benefit SaverNation and its agents. The benefit to the employee is questionable. Most online purchases come with some form of rebate esp if you are a smart shopper. This does encourage the concept of spending to save. It might be a fiduciary issue if Savernation's cashback rebate levels were not competitive. Who is going to monitor this? Essentially the plan is indirectly recommending that employees shop at SaverNation rather than other online retailers. Secondly, how much is the plan being compensated for providing this type of marketing access? Would a similarly situated entity be compensated for providing exclusive access to a group of employees/consumers? Thirdly, would it be a BRF discrimination issue if the type of industry resulted in an inordinate number of HCEs using this feature? Fourthly, there is a deferral timing issue. If the plan only allows quarterly changes then the deferral increases would need to be accumulated for each quarter. Practically speaking there may be recordkeeping issues. Just thinking out loud but it seems to create additional fiduciary duties.

MoJo - since you/your firm looked at this concept - were any concerns raised regarding fiduciary duties or the existence of improper compensation arrangements? Thanks for any words of wisdom!

The cash back is *not* turned into pre-tax contributions. What happens is, when you make a purchase that qualifies you for a rebate, savernaton accesses your 401(k) deferral "system" to increase your deferral by the amount of the rebate. The rebate is deposited into your checking account - and that deposit "offsets" the increase in your deferral amount. It's a simple (or not so simple) way to increase your deferrals in an amount that should be painless because it is offset by the rebate. Of course, you have to spend money to generate the rebate to begin with. Thanks for the explanation. The marketing language threw me off a little: "SaverNation gives employees cash back for their normal monthly purchases and automatically converts it to extra pre-tax 401(k) contributions."

There was a recent NAPA article ( http://www.napa-net.org/news/managing-a-pr...r-opener-ever/) which cited big names such as Brian Graff, James Holland, Bruce Ashton, Dallas Salisbury, etc. The idea is that an online retail portal called Savernation would convert cash back rebate on purchases to pre-tax 401(k) or IRA contributions. Anyone heard of this concept or know how this works? Thanks.

10/15/2012

ESOP Guy: you are correct, it relates more to employment law than pension law. For the most part we rely on our clients' HR Dept to make the determination of employment status. However, there are times when we have to probe further and it helps to ask the right questions. Your insights are appreciated. The issue here is the employee has been on-call for two years but has not worked or been called or paid during the time frame.

If he has not terminated employment, I don't think he has reached his RBD. I am not aware of a minimum hours rule for this purpose. And before someone points out that this could easily be manipulated, yes it could, but the key is really is this person truly on call or is it simply an attempt to avoid taking the distribution. There is no intent in this case to skirt the rules, merely a desire to know and follow the rules. My initial reaction is the same as yours - as long as the employment relationship exists RBD has not been attained.

I have a senior management employee over 70 1/2, no ownership in the plan sponsor. He is not actively employed, but he is on-call and works on certain projects. In some years there is not work for him. He has NOT been formally terminated. Must be receive his minimum distributions? Thank you!

We have the same situation in a 401(k) plan. Any ideas?

Similar situation: plan terminated and trust zeroed out. TPA discovers late deposits. In order to correct late 401(k) deposits, plan SHOULD pay dollar or two late interests to a number of participants in this large plan. It does not seem to be worth the cost of opening accounts, processing distributions, and issuing 1099-Rs. Any suggestions and opinions out there? Thanks.

http://www.irs.gov/Retirement-Plans/Tax-Co...isqualification

1. No federal or state law requires an employer to provide sick pay. 2. It may be paid by either the employer or a third party, such as an insurance company.

The question of fingerprinting is a matter of state law. I believe some states prohibit fingerprinting of employees subject to certain exceptions. The underlying question is one of human relations, the answer for which is usually found in honest communication.

If plan passes 410(b) it does not invoke 410(b) failsafe. May want to check with consultant how 410(b) failsafe applies to 401(a)(4) failure.

Plan doc provides nonelective contribution by payroll. Employer makes miscalculation and does not withhold 401(k) deferrals or make nonelective contribution for a couple of employees. Error is discovered 3 months later. Employer is restoring lost earnings on the 401(k) deferrals. Do they need to restore lost earnings on the nonelective contribution? Thanks for your replies!

It is considered a new plan since it is not a successor plan. A newly established plan (other than a successor plan within the meaning of §1.401(k)–2©(2)(iii)) will not be treated as violating the requirements of this paragraph (e) merely because the plan year is less than 12 months, provided that the plan year is at least 3 months long.

Thanks, Tom, your response is appreciated!

We are reporting Code A participants who have deferred vested benefits and have not been previously reported for a 403(b) plan whose assets are invested in annuities. The plan allows distribution in the form of lumpsum, instalments or annuities. Under line 9d (annuity code) I am using code A (a single sum) and under line 9e (payment code) I am using code A (lump sum). I notice that another practitioner is using code G (J&S) and code B (annually) respectively. What is the right way? Thanks for your opinions and comments!

The health insurance premiums are includible as plan compensation. These amounts are W-2 compensation. Heath and accident insurance premiums paid on behalf of the greater than two percent S corporation shareholder-employee are wages for income tax withholding purposes on the shareholder-employee’s Form W-2. These benefits are not subject to Social Security or Medicare (FICA) or Unemployment (FUTA) taxes.